HK retail sales down 11.4% in July as extradition bill set for withdrawal

By Luke Barras-hill |

Extradition-bill-protestsHK

There is no guarantee that withdrawal of the extradition bill will halt pro-democracy protests in Hong Kong. Source: Studio Incendo.

Retail sales in Hong Kong declined by 11.4% in July year-on-year as the special administrative region continues to grapple with public protests and a fractious political climate.

Provisional estimates from the special administrative region’s Census and Statistics Department reveal the total value of retail sales dropped by 3.8% compared to the same period in 2018.

Taking into account the impact of price changes, July’s result worsened with total retail sales volumes down 13% year-on-year.

Jewellery, watches and clocks suffered the biggest sales hit (-24.4%), followed by optical shops (-17.8%); electrical goods and other consumer durable goods not elsewhere classified (-17.4%); medicines and cosmetics (-16.1%); apparel (-13%); commodities in department stores (-10.4%); and footwear, allied products and other clothing accessories (-10.1%), among others.

EXTRADITION BILL TO WITHDRAW?

Supermarket commodities (+1%) was the only area to return growth.

The July result followed a 7.6% drop in retail revenue in June, when pro-democracy demonstrations against the government’s controversial – now suspended – extradition bill intensified following months of antagonism.

Terminal1-HKIA-overview

Flight cancellations at HKIA in August resulted in knock-on effects to retailers.

At press time, multiple international press outlets have reported that Carrie Lam, head of Hong Kong’s beleaguered administration, is set to announce a formal withdraw of the bill.

In shelving the draft legislation, which proposes that criminals should be extradited to the Chinese mainland, the government would heed to one of five long-running demands from the pro-democracy movement.

It is however unclear at this time whether the bill’s withdrawal would quell months of unrest, which continued despite Lam suspending it in June.

Last week, several prominent activists including Joshua Wong and Agnes Chow from the Demosistō party were taken into custody ahead of mass protests that weekend (31 August).

In a Twitter post today, Wong branded Lam’s response ‘too little, too late’ and called on her to address the five specific demands of the protest movement.

Opposition in the form of increasingly hostile protests have put pressure on the government and Beijing, which while condemning strongly the demonstrations and ‘foreign’ interference has not as yet involved itself directly.

The precarious situation is being stoked by fears of an impending recession against the backdrop of the ongoing China-US trade war and devaluation of the yuan.

As reported extensively by TRBusinessflight cancellations and disruption at Hong Kong International Airport (HKIA) last month resulted in dislocated passenger flows and delays, with knock-on effects to operations for incumbents Gebr. Heinemann, CDF-Lagardère and The Shilla Duty Free.

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